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- GDP (PPP):
- $30.9 billion
- 4.0% growth
- 5.5% 5-year compound annual growth
- $1,724 per capita
- Inflation (CPI):
- FDI Inflow:
Relatively sound macroeconomic management facilitated by cotton and gold exports has enabled Burkina Faso to achieve annual growth rates of over 5 percent over the past five years. Earlier reforms have resulted in some positive trends, reducing poverty. Prospects for reinvigorating growth depend on how much the new democratically elected government can foster political stability.
Systemic weaknesses in protection of property rights continue to hinder development of a more dynamic entrepreneurial environment. Little progress has been made in fighting corruption. The weak rule of law, exacerbated by political turbulence, continues to undermine judicial effectiveness and investor confidence.
Months of tumult that began after widespread protests forced longtime President Blaise Compaoré to resign ended with the first-round election of Roch Marc Christian Kaboré of the People’s Movement for Progress in November 2015. Kaboré is the first president since 1966 to gain office without a coup. Landlocked Burkina Faso is one of the world’s poorest countries. Youth literacy rates are well below the sub-Saharan Africa average, though enrolment in primary and secondary schools has risen over the past decade. In January 2016, terrorists from Al-Qaeda in the Islamic Maghreb and Al-Mourabitoun killed 30 people in the capital city of Ouagadougou in what the groups claimed was retaliation against French and other Western military activities in the region.
Protection of private property is weak. Only about 5,000 land titles have been granted since 1960. Challenges faced by the new government include a weak judiciary, limited enforcement powers of anticorruption institutions, misappropriation of public funds, and the lack of an effective separation of powers. Courts lack resources and are often unwilling or unable to proceed effectively against many senior officials charged with corruption.
The top individual income and corporate tax rates are 27.5 percent. Other taxes include a value-added tax. The overall tax burden equals 15.2 percent of total domestic income. Government spending has amounted to 24.2 percent of total output (GDP) over the past three years, and budget deficits have averaged 2.5 percent of GDP. Public debt is equivalent to 31 percent of GDP.
Reforms to streamline regulation have been implemented and, although progress has been mixed, have helped to enhance the overall entrepreneurial environment. Measures to modernize the labor market and enhance its flexibility have progressed slowly. The state subsidizes fuels and electricity, maintains price supports for cotton, and influences other prices through the public sector.
Trade is important to Burkina Faso’s economy; the value of exports and imports taken together equals 69 percent of GDP. The average applied tariff rate is 7.9 percent. State-owned enterprises distort the economy. The government has pursued banking liberalization and restructuring, limiting its direct participation, but financial firms still lack the capacity to provide a full range of modern services.